Regulatory challenges have been brewing for the past five years following the U.S. Centers for Medicare & Medicaid Services’ (CMS) move to revamp requirements to the hospice election statement.

CMS’ final rule for Fiscal Year 2020 included a new requirement that hospices, upon request, provide an addendum to election statements detailing the care, treatment and services the patients receive that fall outside of coverage within the Medicare Hospice Benefit.

The changes were intended to simplify, clarify and standardize the hospice election process for staff and families alike, according to Meg Pekarske, partner at the law firm Husch Blackwell. The revisions had the potential to improve understanding about hospice and ease clinical staff burdens, she said. However, auditors’ have varied interpretations of the requirements, which has complicated hospices’ journey to compliance, Pekarske stated.

“All of it came with good intent … Unfortunately, this [election statement] can be a moving target because we’ve had [Medicare] contractors approve things and later look at the same form and say it’s not right,” Pekarske said during a recent Husch Blackwell podcast. “So it’s a little head scratching, but there’s a lot you can do to eliminate that risk.”

Effective Oct. 1, 2020, CMS’ provision required the submission of an election statement addendum that lists the rationales for items, drugs and services that the hospice has determined to be unrelated to the terminal illness and related conditions to the patient or patient’s representative. The addendum must also be provided to any other providers caring for the patient and to Medicare contractors. Submission of that document became a condition for payment.

Sometimes staff members who are fielding the election statements may not be very well-versed in the importance of the form when it comes to compliance, conditions of payment and billing capabilities, as well as how it illustrates patient eligibility to regulatory watchdogs, according to Pekarske. Ensuring that staff are sufficiently trained on best documentation practices is crucial, as is helping them understand the implications of inaccurate or incomplete information, she said.

Human error and the redesigned format of the election statement have posed as the two most common reasons for claim denials, said Josi Wergin, health care regulatory attorney at Husch Blackwell. While the revisions to the election statement were intended to shorten the form and make it easier to understand, certain aspects of the form have left a lot of room for potential errors, she said.

Inconsistent regulatory interpretation and enforcement has also been an issue, Wergin indicated. For instance, some auditors can be “very literal” with the interpretation of requirements related to cost-sharing compared to others.

“We’ve seen denials related to stuff being missing. There are issues where we can have human error creep in and there may be a blank line for required information,” Wergin said. “Even missing cost-sharing information, but when we look at the election statement there is discussion of how costs will be shared. These sort of checkbox situations [and] blank lines [can be] a super mega problem. You may have aspects of the election statement that can cause ambiguity or confusion if something is missing or not quite filled out right.”

CMS’ efforts were in part intended to help identify patterns of fraud, waste and abuse including violations of the False Claims Act, which for hospices often focus on patient eligibility. Regulatory oversight has increased amid fraudulent activity, particularly occurring among illegitimate operators in four states of Arizona, California, Nevada and Texas. Swarms of newly licensed operators have entered these regions, with several using fraudulent tactics such as billing for services for patients who did not have terminal conditions and were not eligible to receive hospice.

This requirement has become problematic for hospices due to the complexity of determining which services pertain to the terminal diagnosis and which do not, as well as the work time that such an addendum would require.

The ramped up regulatory scrutiny is needed, but has come with a backlash of compliance and billing issues for legitimate hospice providers across the country, according to Husch Blackwell Partner Brian Nowicki.

CMS sought to provide greater clarity in its 2022 final payment rule, which stipulated that patients and their representatives have the option to request the notice upon electing hospice. The agency also made ​​technical changes and clarifications to the addendum rule that addressed several concerns, including questions related to timing and signature requirements, among others.

Despite the agency’s efforts, election statement deficiencies have become increasingly common and can come with high costs for hospice providers, according to Nowicki. Responding to auditor concerns and claim denials can result in increased staffing burden and reimbursement challenges.

Hospices responding to election addendum claim denials have faced complex processes in administrative law judge (ALJ) hearings, Nowicki indicated. Generally, having a “wealth of material” to support that a hospice was not misleading the patient is key. This can include providing copies of a hospice’s policies and procedures surrounding its election process, as well as doing internal pre-billing reviews of these forms, he stated.

Proactive compliance measures like these alongside ongoing education and awareness of regulatory changes is key to avoiding election-related claim denials, according to Nowicki.

“I’ve argued dozens and dozens of these election cases through the ALJ and for the most part the ALJ wants a practical solution,” Nowicki said during the podcast. “We could make an argument that [the hospice] complied with the law, but if you can also show this makes practical sense, and the way the reviewers looked at it was really hyper technical in a way that made it unworkable or made it more difficult for people to access the hospice benefit, or that it was really an unfair financial consequence to the hospice … Most ALJs are receptive to that.”